Slide 1
Spreading the Wealth: Matching up the Distributed Budget with
the Work PackagesOnce the budget structure is set, the PM is left
with a single budget amount that must be used to fund all the work
packagesIdeally, an individual budget could be assigned to each
Work Package, however each budget has to be individually
managed:Authorized for useChanged to reflected updates/contract
changes etc.Monitored for amount spent vs. amount budgetted (Cost
Monitoring)A practical project often has hundred of individual Work
Packages, so a solution is usually needed to collect and control
the budget at a level somewhere between one lump sum and individual
Work Packages
#3PM3_T_B Planning TimeWhere do we draw the line: the Control
AccountEach Control Account (CA) is a group of Work Packages that
will be:allocated a separate budgetassigned a charge number that
people can charge their time and expenses toseparately managed by a
Control Account Manager to make sureFunding available matches work
requiredExpenses charged belong to the CAthe relationship between
budget allowed and costs incurred is monitored
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#3PM3_T_B Planning TimeCreating the Control accountsNeeds to be
clearly connected to a single body of workMust all fall under one
WBS branchNeeds to be manageable (ie. One boss)Most work has to
fall under one OBS branch
EngineeringDraftingDesignElectricalSystemsMechanicalElectricalMechanical
WBSOrganization BreakdownStructure (OBS)
Control AccountsWork Packages
#3PM3_T_B Planning TimeControl Account Dos and DontsOnly Work
Packages includedAll Work Packages must be includedMust be on one
WBS branchMost work must be performed by the same
organization$$$$$
#3PM3_T_B Planning TimeControl Account Structure ExampleCreate a
control account structure from this WBSResources:Project Management
Carpenter Masonry Metalworker Plumber
#3PM3_T_B Planning Time
Control Account StructurePossible SolutionNote:Cant group
Curtain Walls and Framing because not the same WBS branchCant have
CA for Foundation or Structure because not the same Resources
#3PM3_T_B Planning TimeBudget is usually allocated to Control
Accounts in proportion to the original estimates for all the Work
Packages they compriseTwo methods:Input activity estimates within
scheduling tool then Roll up to the Control Account level If BOE
sheets prepared align with WBS at sufficient level of detail add
BOE sheets for all related Work Packages
Budget Allocation to Control Accounts
674-2435
674-2435
#3PM3_T_B Planning Time
Once control account structure established, charge numbers are
assigned to each either in the scheduling tool (eg. PMPlan) or
(usually) within the company control accounting/ERP systemThe final
product of cost budgetting is the Control Account Plan which
distributes the budget to the Control Accounts (hence to Work
Packages), and ties these into the corporate control accounting
system
CostAccount #Work PackageBudget AmountAccounting Info/ERP
Integration Tibor Bocz, 2008; LIMITED RIGHTS: The author grants
limited rights for reproduction and distribution of this
presentation material in accordance with Limited Rights Agreement
BOCZ/EC0810The Control Account Plan
#3PM3_T_B Planning Time